E.ON to Give Post-2010 Earnings Outlook Mid-Year, Bernotat Says
March 10, 2010, 4:03 AM ESTBy Nicholas Comfort
March 10 (Bloomberg) -- E.ON AG, Germany’s largest utility, will give an earnings outlook for 2011 onwards at the middle of this year as economic progress remains “difficult” to gauge.
Chief Executive Officer designate Johannes Teyssen “will present his concept of the strategic development of the company, including new targets for the years after 2010 in the summer,” CEO Wulf Bernotat said in a copy of a speech planned for today.
E.ON said earlier today that it expects adjusted earnings before interest and tax to rise by as much as 3 percent in 2010 from 9.65 billion euros ($13.1 billion) last year. A year ago, the company forecast an increase of about 10 percent in so- called adjusted Ebit to 11 billion euros in 2010.
“It is difficult to predict the pace of economic recovery, in particular, the market environment of our gas business is adversely affected by overcapacity,” E.ON said today in the company’s 2009 report. The company sold businesses last year that had contributed about 1 billion euros in earnings, Chief Financial Officer Marcus Schenck said in a copy of a speech.
E.ON fell as much as 1.4 percent to 26.51 euros in Frankfurt trading. The stock was at 26.845 euros as of 9:53 a.m. local time, taking its decline this year to 8.2 percent, compared with a 4.4 percent decline in the 31-company Dow Jones Stoxx Utilities Index, which includes the Dusseldorf-based energy supplier.
Asset Sales
The utility has raised close to 6 billion euros after selling high-voltage power lines, almost 20 percent of its electricity generation capacity in Germany and a holding company for stakes in local energy providers, according to a Feb. 16 presentation.
E.ON is examining the sale of its U.S. utility business, valued at about 4 billion euros by analysts, to reduce debt, a person briefed on the matter said March 2. The person declined to be identified because the plans are private. E.ON spokesman Mirko Kahre declined to comment at the time.
The energy supplier is also grappling with a drop in demand as the global economic slump causes industrial clients to idle factories. Power and natural-gas use fell about 5 percent last year, according to the Berlin-based BDEW utility group.
Lower consumption meant European spot prices for gas fell to about half the level set in long-term contracts with E.ON’s suppliers last year, reducing the profitability of its gas unit.
OAO Gazprom, the world’s biggest gas producer, said last month that it agreed to consider the use of spot prices in long- term contracts with European customers to retain market share.
E.ON said in August that Vice Chairman Teyssen will replace Bernotat as CEO from May 1. Bernotat has been at the helm of the utility for seven years.
--Editor: Amanda Jordan
To contact the reporter on this story: Nicholas Comfort in Dusseldorf via the Frankfurt newsroom at ncomfort1@bloomberg.net
To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net
